Standing Committee B

[Mr. Martyn Jones in the Chair]

Clause 6

Possession etc. of articles for use in frauds

Amendment proposed [this day]: No. 5, in clause 6, page 3, line 3, after ‘article', insert ‘intended'.—[Mr. Grieve.]

Question again proposed, That the amendment be made.

Martyn Jones: I remind the Committee that with this we are discussing the following amendments: No. 9, in clause 6, page 3, line 3, leave out ‘for use' and insert
‘which he intends to be used'.
No. 10, in clause 6, page 3, line 3, leave out ‘connection with' and insert ‘furtherance of'.
No. 11, in clause 6, page 3, line 3, at end insert
‘carried out by him or any other person'.

David Heath: I welcome you to the Chair of the Committee this afternoon, Mr. Jones. I cannot claim to have made more than introductory comments on the group of amendments under consideration during this morning’s sitting, so I will reiterate.
The clause, as the Committee will recall, deals with the possession of articles for use in frauds. The issue is whether there should be an express intent in the clause. There is no mens rea provision at the moment. Interestingly, in clause 7, there is such a provision, so there is a difference between the two clauses. The only thing that might be construed as intent is the importation of the form of words from the Theft Act 1968:
“for use in the course of or in connection with any fraud.”
I understand that that has been construed to imply intent. It is certainly not explicit and it requires interpretation.
The question is whether we should make it absolutely explicit that the article in question should be in the possession of the person with a clear intent to commit a fraud. The hon. Member for Beaconsfield (Mr. Grieve) has already moved amendment No. 5, which would insert the word “intended” after “article”, so the clause would read
“any article intended for use in the course of or in connection with any fraud.”
As I intimated to him in an intervention, my difficulty with that wording is that an article may be intended for use in fraud but by a different and separate person from the person who is carrying the article or has control of it. So I am not sure that the amendment specifically addresses the issue that we wish to raise.
In amendment No. 9, I propose an alternative form of words, which makes it clear that the person who is guilty of the offence has the article in his possession or under his control and intends it to be used in the course of, or in connection with, fraud. That makes the connection between possession and intent absolutely explicit and, I think, improves the wording of the clause.
Amendment No. 10 would make the connection still more explicit. I understand that the Solicitor-General may say that it is better to have conformity between the two pieces of legislation, so that they are expressed in the same terms. I think that “in furtherance of” is better than “in connection with” because there are many items that could be used in connection with fraud but are not intended for use in a fraud. A printer on which counterfeit documents are produced might be an article that is used in connection with fraud but there may be no intent to do that, whether implicit or explicit, in possessing that printer. The words “in furtherance of” make it clear that there is a causal relationship and one of intent between possession and use in the prosecution of a fraudulent or dishonest act. I commend that amendment to the Committee.
Amendment No. 11 is perhaps a counter-balance to what I said earlier. If it is clear that the intent must be proven by the prosecution, it seems to be entirely reasonable that the provision should not require that the article for use in the fraud is to be used by the self-same person. What I am suggesting is that, by inserting
“which he intends to be used”
and adding
“carried out by him or any other person”
we will retain the sense by which an article might be carried by one person, to be used by another, but we insert the clear requirement for intent to be proven.
The clause as currently worded is capable of being construed in the way that I want it to be construed, but it is not unambiguous. My amendments would strengthen the provision, make the intent clear, and to a considerable degree bring clause 6 into line with clause 7, where the intent is clearly stated.

Mike O'Brien: Welcome to the Chair, Mr. Jones. Hopefully we will make some brisk progress today under your chairmanship. I am sure that we will all have an interesting debate on some of the clauses.
I detect some difference in view between the Opposition parties. The Conservatives seem to want a more specific intention drawn into the clause, whereas the Liberal Democrats want a broader, or general intention of the sort that the Government favour. The objective of the Liberal Democrats seems to be to insert into the clause that which we believe is already there by case law. The view of the Conservatives, unless I have misinterpreted it, is to be much more specific about the nature of the intention.
We have been living with an offence worded in the same way as clause 6 for nearly 40 years. That offence is in section 25 of the Theft Act 1968, which applies not only to burglars but to those going equipped to commit a cheat. A cheat is defined as a crime of obtaining property by deception under section 15 of the Theft Act. The years since 1968 have provided case law on the provisions, the most important of which for our present purposes is Ellames, which I mentioned on Second Reading and is referred to in the explanatory notes.
I will be a bit broader than the explanatory notes in identifying some of the issues here, as that may be helpful to the Committee. Mr. Justice Brown said during the Ellames case:
“In our judgment, the words in section 25(1) of the 1968 Act: ‘has with him any article for use’ mean ‘has with him for the purpose’ (or ‘with the intention’) ‘that they will be used’. The effect of section 25(3) is that if the article is one ‘made or adapted for use in committing a burglary, theft or cheat’, that is evidence of the necessary intention, though not of course conclusive evidence. If the article is not one ‘made or adapted’ for use, the intention must be proved on the whole of the evidence—as it must be in the case of an article which is so made or adapted, if the defendant produces some innocent explanation. We agree with the learned authors of Smith and Hogan: Criminal Law...that section 25 is directed against acts preparatory to burglary, theft or cheat”—
and that questions of Mr. “D’s”, the defendant’s—
“knowledge of the nature of the thing can hardly arise here, since it must be proved that he intended to use it in the course of or in connection with”
the burglary, theft or cheat
“and that the mens rea for this offence includes ‘an intention to use the article in the course of or in connection with any of the specified crimes”.
He continued:
“In our view, to establish an offence under section 25(1) the prosecution must prove that the defendant was in possession of the article, and intended the article to be used in the course of or in connection with some future burglary, theft or cheat. But it is not necessary to prove that he intended it to be used in the course of or in connection with any specific burglary, theft or cheat; it is enough to prove a general intention”—
I think that is the important phrase here—
“to use it for some burglary, theft or cheat; we think that this view is supported by the use of the word ‘any’ in section 25(1). Nor, in our view, is it necessary to prove that the defendant intended to use it himself”—
which is the point that the hon. Member for Somerton and Frome (Mr. Heath) made—
“it will be enough to prove that he had it with him with the intention that it should be used by someone else.”

Dominic Grieve: I shall take this opportunity to clarify a remark that the Solicitor-General made earlier, when he thought that there was a difference of approach between the hon. Member for Somerton and Frome and me. I do not believe that there was. I understood fully the difference between the two forms of wording and, as I acknowledged at the outset, the wording proposed by the hon. Gentleman may be better than mine, but our intention was identical. I want to make it clear that I certainly was not seeking, by way of the amendment, to narrow the provision so that it had to be proved that the person intended to use the article in some specific form of fraud. On the contrary, the proposal was merely that it would be for use in fraud.

Mike O'Brien: I am grateful to the hon. Gentleman for that clarification of his position and I accept that both Opposition spokespersons want an outcome that is not too different from what the Government want. The question is whether we need to import that by way of amendment or whether it is, in effect, already imported.
Section 25 of the Theft Act 1968 needs to be replaced by clause 6, because it does not cover cases in which the possession takes place in the home, and the objective is that the provision should include such cases. Concern about it being used against people who have no fraudulent intention is misplaced, as Ellames makes it clear that an intention is required. Amendments Nos. 5 and 6 are unnecessary because the Ellames case will be imported, in effect, into the clause.
Amendments Nos. 10 and 11 are also unnecessary. The part of Ellames that I quoted makes it clear that the intended fraud does not have to be committed by the possessor; it may be committed by someone else.
The same case provides authority for attaching a wide meaning to “in connection with”. This part of the Ellames judgment is relevant to that. I think that I have already quoted some of it, but essentially it says:
“The object and effect of the words ‘in connection with’ is to add something to ‘in the course of’.”
Whether “in furtherance of” would carry such a wide meaning is open to question. We do not want to risk not covering any of the huge variety of acts that may be preparatory to fraud. Opposition Members may believe that “in connection with” is too wide, but I do not agree, as the whole offence is underpinned by the requirement for a general intention to commit fraud, so no truly innocent person has, in my view, anything to fear.
All four amendments are not only unnecessary but undesirable, because they would take us away from the section 25 wording and thus deprive us of the case law associated with the existing provision, and the case law has been extremely useful in making it clear to the courts where they ought to be going. Accepting the amendments would have implications for section 25, which will remain in force to cover burglary and theft. We do not want to have one form of wording for one set of offences and different wording for a very similar set of offences relating to fraud. The courts would want to construe what the difference was, and we know from this discussion that no difference is intended.
It is necessary to ensure that we keep the similar case law and the similar intention. I do not think that there is any great disagreement of principle between any of us on how we would like the clause to be applied, but I want to ensure that we maintain the clarity of the provisions, that the courts know what they are about and that the jury is therefore able in due course to make a judgment about the outcome of a case.

David Heath: I am most grateful to the Solicitor-General for the way in which he has approached this discussion. I agree with him: I do not think that there is any difference in our intentions—in what we want the clause to do. I believe that, were section 25 of the 1968 Act not to be in place and were we to be creating an offence today in isolation, my wording would be better. I have been quite plain about that. My wording is more explicit.
However, the Solicitor-General is confident that the Ellames case, imported into consideration of this offence, will identify the necessity to prove intent and will be construed in terms of the article being in the possession of one person, although possibly being used by another person in the commission of a fraudulent act. If that confidence is well placed—I have no reason to suppose that it is not—I think that the provision comes to the same conclusion as my amendment, were it agreed to.

Mike O'Brien: Let me provide some reassurance. In construing a statute, the courts are able, under Pepper v. Hart, to take account of ministerial statements in the House and explanatory notes. The explanatory notes on the Bill draw attention to the case of Ellames. It may be helpful to tell the hon. Gentleman that Lord Steyn said in Westminster city council v. National Asylum Support Service in 2002 that explanatory notes
“cast light on the objective setting or contextual scene of the statute and the mischief at which it is aimed, such materials are always admissible aids to construction.”
The fact that the explanatory notes specifically mention Ellames means that the case is important.

David Heath: I think that we have successfully Pepper-and-Harted Pepper v. Hart, which is helpful in respect of any future construction placed on the clause. On that basis—I understand what the hon. Member for Beaconsfield said—I do not intend to press my amendments.

Dominic Grieve: I welcome you to the Chair, Mr. Jones. I reiterate what I said to the Solicitor-General a moment ago in my intervention. The purpose of my amendments was not to narrow in a huge fashion the definition of the person who would be caught by clause 6.
It is worth bearing in mind—perhaps we have not touched on it—that the clause differs in one important material particular from going equipped to cheat or to commit theft, in that that is restricted to a person not at their place of abode. It was clearly envisaged that that definition should refer to the person with the bag marked “swag” with a jemmy inside it. That has a rather old-fashioned ring about it when viewed by the standards of 21st century crime. The Bill would widen the scope of the effects to include equipment found in a person’s home. There may be some common ground between the hon. Member for Somerton and Frome and I on that.
In view of the fact that I suspect that a great deal of the relevant equipment could also have an innocent use—I am not an expert, but I can see that there may be innocent uses for the sorts of equipment that could be used for the purpose of fraud, including computer fraud—we have to be careful about ensuring that we leave people with the ability to mount a satisfactory defence and prove their innocence and do not start moving towards an offence of strict liability.

Michael Fabricant: May I give an example? I have a CD-ROM, as have many members of PICT—the parliamentary information and communications group, or whatever it stands for—that enables us to enter a locked PC. That could conceivably be used to break into a computer illegally to extract internet banking information—

David Heath: A virtual jemmy.

Michael Fabricant: Yes; an internet jemmy, in fact. Would that not fall under the auspices of the clause?

Dominic Grieve: My hon. Friend makes a good point. That was precisely the source of my concern. As to the difference in wording between what I should like to see included and that of the hon. Member for Somerton and Frome, on reflection I am not sure that it makes a huge difference. It is clear that the word “intended”, inserted by my amendment, could apply to an article that was intended for use by another as well as for use by that person. My amendment is more limited in scope than the hon. Gentleman’s, which is why I was surprised to hear the Solicitor-General suggest that I was trying to narrow the scope further than the hon. Gentleman.

Mike O'Brien: The observation was from the hon. Gentleman’s broader comments, rather than on the clause. I tend to agree with his interpretation of the difference—or not—between his amendment and that of the Liberal Democrats. It was listening to his remarks rather than looking at the clause that caused me to make the comment.

Dominic Grieve: I am grateful to the Solicitor-General. This was a probing amendment, and he has provided a great deal of reassurance. I hope that the debate, having gone on the record, can, if necessary, be quoted along with the explanatory notes should any issue arise. I certainly agree with the Solicitor-General that it is probably undesirable for there to be a difference in wording between this and going equipped. However, there is an inherent difference of wording in that the scope of the offence is wider because it applies to people’s domestic premises.
With that in mind, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 ordered to stand part of the Bill.

Clause 7

Making or supplying articles for use in frauds

Dominic Grieve: I beg to move amendmentNo. 1, in clause 7, page 3, line 15, leave out ‘or' and insert ‘and'.
This follows on from our earlier debate, but is slightly different because there is no equivalent offence to making or supplying an article as that is defined here. Subsection (1) states:
“A person is guilty of an offence if he makes, adapts, supplies or offers to supply any article—knowing that it is designed or adapted for use in the course of or in connection with fraud, or intending it to be used to commit, or assist in the commission of, fraud.”
If paragraph (a) were confined to knowing that it is designed for use in the course of fraud, I should not be so concerned. However, adapted for use in the course of or in connection with fraud seems to be a wide term. I worry that it could catch somebody who makes a perfectly reasonable device for legitimate use. On Second Reading, I used the example of the conjuring trick. Such tricks usually require somebody to commit a fraud upon a willing group of spectators. To say that an article of that sort is unlawful causes me concern, particularly as it is not “and” intending it to be used to commit, or assist in the commission of fraud but “or” intending it to be used to commit, or assist in the commission of fraud.
One way of dealing with the matter would be to say that it should not be “or” but “and”. That is what the amendment would achieve. However, I am aware that that would create a restricted offence of specific intent. I acknowledge straight away to the Solicitor-General that that might be too restrictive. Therefore, this, too, is a probing amendment, designed to tease out in the course of debate whether what has been drafted here correctly meets what we are trying to achieve, or whether it goes a little too far.
I shall listen to the Solicitor-General with interest, but my first reading of the clause made me slightly surprised, because articles made, adapted, supplied or offered is a wide term. The nature of fraud being what it is, all sorts of items could be included in that category. I shall be interested to know what defence could be raised, for example, if a person knows that he is supplying an article to a conjuror. He knows very well that it is designed or adapted for use in the course of or in connection with fraud—or could be—but that is not what is intended. Does he have a defence? That is the key question that the Committee needs to debate.

Mike O'Brien: The clause makes it an offence for a person to make, adapt, supply or offer to supply any article for use in fraud. The impact of the amendment would be to place a highly undesirable restriction on the breadth of the offence. It would narrow the offence much too much.
As it stands, clause 7 allows for a precise distinction to be made between the parts played by those who know that an article is made or adapted for use in the commission of fraud and those who intend that it should be used for fraudulent purposes. I assure the Committee that the distinction is a significant one. For example, it is possible to imagine the supply of an ordinarily innocent article—in other words, an article, that under any circumstances, could be used legitimately—to be used in the commission of a fraud.
The example of a credit card reader comes to mind. The device has not been made or adapted with the fraud in mind but could be supplied with the intention of it being used fraudulently. There are other examples. A person may have software that is capable of being used fraudulently, but it has not been made for that purpose. The hon. Member for Lichfield (Michael Fabricant) referred to such an item. A person supplies security devices that are designed either to prevent fraud or to give legitimate access to something and it may well be that a person intends that they be used for a fraudulent purpose. A person might sell credit card numbers, usually on the internet, knowing that they could be used to commit fraud. There are all types of things that might come to mind.
Conversely, a criminal may make an article specifically for a fraud—for example, a device covertly to copy credit cards—but be ambivalent about whether the person to whom it is supplied will use it for fraud. He will not have the intention necessary for clause 7(1)(b) but will fall within clause 7(1)(a).
The amendment seeks to provide not only that the article must be specifically made or adapted for use in fraud but that the person who makes or adapts it must intend that it be used in fraud. That would significantly limit the clause’s effect and would not catch either of those examples.
The importance of the clause is that it should be able to cover both varieties of offence, thereby allowing for the fact that those who make, adapt or supply articles for use in fraud may not have any intention to carry out the fraud themselves. That carries weight in the fight against organised criminal gangs, which often prefer to engage in fraud at several moves from the action, for example, by selling personal financial information. The aim is that that will be used for a fraud, but they do not carry out the fraud themselves. Clause 7 will not capture the actions of the innocent, which necessarily include the actions of those innocently unaware but somehow caught up in the commission of an offence.
The clause 7 offence, like the existing law in section 25, does not contain a dishonesty requirement, but requires that the article be made for use in a fraud. Therefore, the supply or manufacture of articles, such as devices and software, which are designed innocently, but might possibly be misused to commit a fraud would not be grounds to give rise to a charge for fraud.
The wording used in clause 7 follows the existing law in section 25 of the Theft Act and, as we have discussed, case law has established that it requires a general intention to commit fraud. I hope that hon. Members are reassured by that and that we can make some progress.

Dominic Grieve: I am reassured. We can move on. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7 ordered to stand part of the Bill.

Clause 8

“Article”

Question proposed, That the clause stand part of the Bill.

Mike O'Brien: The clause defines “article” for the purposes of clause 6 and 7 offences and some other connected provisions. It gives the term a breadth of meaning that is needed in these days of computer crime. It makes it clear that the definition includes any programme or data held in electronic form that may be used in the course of, or in connection with, fraud.
Given the intense and rapid extension of technology in recent years, it is vital that the new offences give sufficient coverage to articles such as computer programmes that generate real credit card numbers, or computer templates that can be used to produce fake utility bills as proof of identity. The wording of this part of the clause follows wording in section 17 of the Computer Misuse Act 1990.

Question put and agreed to.

Clause 8 ordered to stand part of the Bill.

Clause 9

Participating in fraudulent business carried on by sole trader etc.

David Heath: I beg to move amendment No. 14, in clause 9, page 4, line 1, leave out paragraph (b) and insert—
‘(b) for any fraudulent purpose.'.
The amendment is probing the precise terms of the clause. It suggests replacing subsection (2)(b) with a briefer paragraph (b).
The clause is important, and I do not want in any way to reduce its effectiveness in dealing with fraudulent business carried out by a sole trader. However, I do not understand the requirement to show
“intent to defraud creditors of any person or for any other fraudulent purpose.”
The clause does not refer to creditors of the business but to creditors of any person, which I suggest is the universality of people. Most people will be creditors, at least temporarily, of at least one other person and will be debtors to at least one other person. Therefore, I do not understand what is meant.
“Fraudulent purpose” includes creditors of the company, and indeed creditors of any other person or any other trader. Therefore, it is a simplification and a clarification to use the simple phrase “for any fraudulent purpose” rather than the obscure phrase that is in the Bill. Perhaps the Solicitor-General will be able to tell me that I am quite wrong and that there is a specific meaning that necessarily attaches to the phrase and must be in the Bill. I look forward to his response.

Mike O'Brien: The amendment is designed to rationalise the wording of clause 9 by focusing solely on the fraudulent nature of the offender’s conduct. In my view, it is unnecessary.
The new fraudulent trading offence originates with a recommendation in a 2002 Law Commission report on multiple offending. It was based on what the commission concluded was a gap in the law that arises because it is possible to prosecute UK incorporated companies for fraudulent trading but not to pursue other fraudulent traders for that offence.
Clause 9 extends the fraudulent trading offence in section 458 of the Companies Act 1985 by creating a corresponding offence that will apply to all businesses not already covered by the 1985 Act. Logically, the wording of clause 9 must follow that found in section 458—hence the wording in the Bill.
It is important to bear it in mind that clause 9 creates a parallel offence linked to the existing fraudulent trading offence. The rationale and structure of the new offence flow directly from the Companies Act offence, and as such attract the case law that attaches to it. If we were to start changing the legislation, the courts would be busy trying to work out why we changed precise wording in section 458. We must remain consistent. Initiating a change here would have consequences for the interpretation of section 458. Therefore, it is sensible and desirable that the wording of clause 9 should stay as it is.
We used the phrase to ensure that we got the parallel offence right. The new offence applies to businesses that obviously are not companies. The creditors can be creditors of the business, but the business is not of itself a legal person in the sense that companies or individuals are legal persons. A partnership, or another business relationship, may not of itself be a legal person, and the creditors can be creditors of the business, but the business is not a legal person in its own right; rather, the creditors will be creditors of the owners of the business, who may or may not be the defendant.
I hope that that answers the hon. Gentleman’s concerns, and that he can withdraw the amendment.

David Heath: Predictably, it does not. I have always found that consistency in error bedevils our debates; it seems a pointless view that just because a thing was done once before, it needs to be done again, even if it is self-evidently unnecessary or otiose. I cannot conceive of any circumstances in which
“intent to defraud creditors of any person”
would not be encompassed in the phrase “for any fraudulent purpose”. It is a tautology, and plainly so. The only part of the Solicitor-General’s argument that commends itself to me is the need to apply consistency between the two company offences. If we introduce no error in law by removing a tautology, it is worth doing. That is my personal opinion, but I give way to the hon. Member for Beaconsfield, who may tell me why I am wrong.

Dominic Grieve: For what it is worth—and the hon. Gentleman knows the number of times that I have argued over drafting—I agree entirely with him. That said, the words are completely innocuous if they remain in the Bill as they are. They are just odd, and no more than that can be said.

David Heath: No more than that might be said, but it undoubtedly will be. The words are odd, but what nags away at the back of my mind is the fact that someone at some stage must have had an intention: someone, in drafting the original Act, must have detected a circumstance in which
“intent to defraud creditors of any person”
did not fall within the general compass of a fraudulent purpose. However, we have not heard yet what that distinction might have been.

Dominic Grieve: I think that the hon. Gentleman is over-optimistic in his view that there was necessarily a rationale behind the drafting. I have seen too much such legislation. There was the Public Processions (Northern Ireland) Act 1998, which dealt with the playing of “musical or other instruments”, and nobody was able to explain what an “other instrument” might be. We actually got that deleted as a result of my participation in that debate, but I leave the hon. Gentleman to speculate on what was in the mind of the draftsman in that occasion. I suspect that in this case the legislation, particularly in view of its derivation and origin, belongs to the classic period of belt-and-braces drafting.

David Heath: I say one word to the hon. Gentleman: bagpipes. That is perhaps unfair; I am actually rather fond of bagpipes, but they are commonly held not to be the most musical of instruments, stirring though they are. He is probably right: it is a belt-and-braces provision. I do not want to make a meal of it, and I do not think that there is any mischief in the words remaining as they are; it just irritates me when drafting is tautologous. When I rule everything, I shall not have laws drafted like that. However, I shall withdraw the amendment.

Geoffrey Cox: I do not know whether this is a speech or an intervention; it was intended to be the first, but it will be very short.
The answer to this very interesting and learned debate may lie in the fact that the section was originally drafted in the Companies Act. For companies, there are multifarious opportunities to have related companies—subsidiaries, parent companies and so on—and one may very well operate a company in order either to defer the debts or to defraud the creditors of a related parent or subsidiary company.

Michael Fabricant: Enron.

Geoffrey Cox: I hear one company appositely named; I could probably think of quite a few others. The point is that the wording was probably interpolated from the Companies Act to deal with cases where, although the creditors were not of the specific limited company, they were creditors of a related company. The danger was that the defence might argue that the debts related not to the company but to the subsidiary or affiliated company. It might therefore be otiose to insert that when one is charging a sole trader or a partnership.
One suspects that that was the reasoning behind section 458 of the Companies Act 1985, the wording of which is not
“for any other fraudulent purpose”,
as it is in clause 9(2)(b), but rather relates to any fraudulent purpose. The general theory applying to fraudulent trading is that a person can be charged for continuing to trade in order to defraud the creditors of the company, or a related company or person, or for carrying on the company to operate as part of a wider fraud. I suspect that because the wording
“for any other fraudulent purpose”
has been translated from companies to sole traders, it might actually not be necessary. The Government might simply have translated wording apposite to limited companies to sole traders.
If that was an intervention, it was very long; if it was a speech, I hope that it was relatively short.

David Heath: I am most grateful for that intervention by the hon. Gentleman, who knows an awful lot more about the matter than I do. His interpretation suggests that the requirement was supposed to be inclusive and to expand the scope of the provision, rather than to be exclusive and to narrow the scope. In that case, it is most likely that the wording has been translated from one enactment to another, simply as a matter of course, without anyone thinking about whether it is necessary.
I repeat what I said earlier: I do not think that any mischief is involved. I want the clause to be able to be used for lots of actions on the part of traders—the disposal of assets prior to liquidation and matters of that kind. I hope that it will be enforced rigorously for those purposes. I want it to be as wide as possible in its application. Given that retaining the words does not reduce the width of the application but simply states it in two different ways—one partially and the other totally—I can find no fault with it. So, for the second time, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9 ordered to stand part of the Bill.

Clause 10

Participating in fraudulent business carried on by company etc.: penalty

Question proposed, That the clause stand part of the Bill.

Mike O'Brien: The clause implements a recommendation by the company law review in 2001 that the penalty for the offence of fraudulent trading in the Companies Act should be increased from seven to 10 years in order to align it with the most serious fraud offences in the Theft Act 1968. We agree that that is a sensible change, particularly in the context of the Fraud Bill, under which 10 years is the maximum penalty for the general offence of fraud. Fraudulent trading can have serious consequences, and although relatively few cases are prosecuted, average sentences are higher than for other types of fraud.

Question put and agreed to.

Clause 10 ordered to stand part of the Bill.

Clause 11

Obtaining services dishonestly

David Heath: I beg to move amendment No. 12, in clause 11, page 4, line 33, leave out ‘by a dishonest act’ and insert ‘dishonestly’.

Martyn Jones: With this it will be convenient to discuss amendment No. 13, in clause 11, page 5, line 2, at end insert—
‘( ) A person shall not be guilty of an offence under this section if—
(a) the services obtained comprise only observing a performance, sporting or other event, and
(b) he is not within, nor has he sought to enter, the premises within which the performance or event are being held.'.

David Heath: The amendments are quite separate, and I shall deal with them in turn.
Amendment No. 12 might sound like a very small distinction, but actually it has greater import than would first appear. First, stylistically, it brings the text of the clause in line with the clause title: “Obtaining services dishonestly”. That seems appropriate.
Secondly, however, there is a difference between a dishonest act and a person who performs an act dishonestly. A dishonest act is, or could be, interpreted to be so at a later date, and the perpetrator may not be party to that interpretation. In other words, he may not have been behaving dishonestly but may have committed an act that, on consideration, is seen as dishonest. That puts the act at one remove from the intent.
The distinction is very narrow: in most cases, a person who commits a dishonest act will know perfectly well that they are doing so and will have been acting dishonestly. However, on a limited number of occasions, an act that could be interpreted as dishonest is committed by a person who believes that he is acting honestly. Using the adverb rather than the adjective would remove any possibility of ambiguity or legal argument on that nice distinction. There could be no distinction: if the person was obtaining services dishonestly, he would be doing so by a dishonest act, but would also know that he was doing so by a dishonest act because he was acting dishonestly.

Michael Fabricant: The hon. Gentleman is saying that the person should have mens rea—a guilty mind—and that there should be an intent to obtain services dishonestly. However, subsection (1) also says that the act should be in breach of subsection (2). Does that not also imply that he must have a guilty mind?

David Heath: I do not think that it does. Subsection (2) lists a number of circumstances in which a person has obtained services, and I do not think that the two necessarily relate.
The amendment is narrow and I do not want to labour the point. However, simply using the adverb improves the clause and makes it say exactly what the Minister would want it to say. He may feel that the clause will be interpreted in that way in any case, in which case the amendment becomes unnecessary.
The second amendment in the group, No. 13, is a probing amendment to enable the Minister to say what I understood him to have said on Second Reading. It relates to a particular circumstance in which the service obtained is watching or taking in an event—a sports match or a performance perhaps—without paying. There are circumstances in which that would clearly be a fraudulent and dishonest act. A person who goes under a fence, knowing perfectly well that he has avoided going through the turnstile, is trying to obtain a service without paying. That is not in dispute.
However, there is a further and greyer area: when a person is watching a match because he has secured a vantage point from which he can see it, clearly with the intent of not paying, but nevertheless without potential detriment to the person who has put on the event. I can give an example of that from Bath.
I regularly watch Bath play rugby; the experience used to be good, although it is often unhappy nowadays. People can pay for seats at the Rec, the recreation ground in Bath. I received my season tickets just today and am now much less well off than I would otherwise have been. If a person happens to live in one of the houses on Great Pulteney street that overlook the ground, he can see the match for free. I do not think that in any circumstances a person could be deprived of the right to look out of his window or stand on his balcony and watch the match for free. He is as entitled to look out of his property in that direction as any other. That is not the problem.
However, if one is clever, one can also go down one of the side turnings off Great Pulteney street, hoick oneself up to look over a wall and see the match equally free from a public thoroughfare. I do not believe that that should be a criminal offence. It is merely a happenstance. The simple fact that one can see the match from there does not mean that Bath rugby football club—or Bath Rugby plc—would be entitled to commence proceedings against someone who happened to be able to see the match from that vantage point outside the ground’s perimeter.
I hope that the Minister will make it absolutely clear in his response, so that I do not need to press the amendment, that in such circumstances an offence would not be committed, despite the fact that the person was not on their own property and was partaking of the event—the spectacle or match—without paying and with the intent of not paying, as they had no intention of going through a turnstile. Will he reassure me that just because they have not tried to secure entry to the ground, arena, theatre or whatever, they are not securing that service dishonestly and would not be liable to prosecution under the provision? If he can do so, it is not my intention to press the amendment.

Dominic Grieve: I listened carefully to the hon. Gentleman. Although I understand what he is doing with the first amendment, I am not sure that I agree with him. I wait with interest to hear what the Solicitor-General will have to say, because it seems to me that the nature of the obtaining of a service requires a “dishonest act” to obtain it. Using that expression rather than the word “dishonestly” might well be a correct piece of drafting and does not in any way imply that dishonesty does not have to be proved. I shall wait to hear what the Solicitor-General has to say.
As regards the second amendment, again I shall wait with interest to hear what the Solicitor-General has to say, but as the service is the thing being obtained it strikes me that if someone is perching out of their window watching a cricket match that they are not paying for, they are not obtaining a service, which is the entry into the ground to watch the cricket or football match.

David Heath: That is precisely the point. Is the service entry to the ground or watching the match, event, spectacle or whatever? I am not sure that we are as clear cut in that distinction as we would like to be.

Dominic Grieve: And the hon. Gentleman was right to raise it. Applying some common sense to subsection (2), I think that the service must be the right to enter a particular area in order to watch the game. If in fact one can watch the game from somewhere where one does not have to pay for the service, that is tough on the service provider. I certainly do not think that the Government intend to criminalise people who look off their balconies, nor do I think that that the subsection does so. His argument is ingenious, but I do not think that it would carry much weight with the court.

Jeremy Wright: Does my hon. Friend agree that there might be another potential difficulty that perhaps the hon. Member for Somerton and Frome has not considered? One of the issues that the Government considered in relation to clause 11 was the problem of those who watch television through cable or other connections that are supplied through fraudulent means. The difficulty with the clause, if it were to be drafted as the hon. Gentleman wishes, would be that those who watch sporting performances on television might be caught by his redrafted clause. I am sure that he would not want that.

Dominic Grieve: My hon. Friend raises an interesting point—perhaps another conundrum for the Solicitor-General to answer—and it seems to me that his argument has some force.
I shall wait to hear from the Solicitor-General, but on both matters I think that the hon. Member for Somerton and Frome, with whom I often agree, is for once probably worrying about nothing.

Mike O'Brien: I shall begin with amendment No. 13, and reassure those who want to watch the rugby from Great Pulteney street that they should be able to continue to do so. Not only that, the crowds who sometimes watch the cricket from windows and rooftops around the Oval are not intended to be caught by the clause.
The test is the one in the Ghosh case in 1982 that I mentioned earlier. It is a two-stage test that is well known. The first part is whether the defendant’s behaviour would be regarded as dishonest by the ordinary standards of reasonable and honest people. If it would, the second part is whether the defendant was aware that his conduct was dishonest and would be regarded as such by reasonable and honest people. When we apply those tests, we can distinguish the sorts of circumstances that hon. Members are concerned about.
I reassure those who watch a game by luck and opportunity that they should not be in a position where reasonable and honest people would regard them as acting dishonestly. That test enables reassurance to be given in the particular circumstances that concern hon. Members with regard to amendment No. 13.
Amendment No. 12 would alter clause 11(1)(a), which requires that for the offence to be made out a “dishonest act” is required. The hon. Member for Beaconsfield has set out my case very well. Just to assist him in that, I shall quote the Law Commission’s 2002 report, which stated:
“It should not be possible to commit the offence by omission alone. This offence would not, for example, be committed by a person who innocently happened to be on a boat and, despite hearing an announcement that anyone who had not paid for the next trip should disembark, remained on the boat and thus received a free ride”.
The Government agree with the view that there should be an act and that it should be explicit that there is an act. We do not want to criminalise the obtaining of services by omission, as that risks leaving citizens too much at the mercy of unscrupulous service providers, who provide unrequested services, for example through the internet or by telephone.
While the dishonesty requirement should provide protection from prosecution for the innocent, we also wish to avoid a situation in which unscrupulous service providers might feel able to pressurise anyone who had obtained services that they had not requested. Indeed the formulation of clause 11 may discourage those service providers from making unwanted services available in the first place. In our consultations in 2004, clause 11 was widely welcomed and no problems were raised on this aspect of it. I hope that, given those reassurances, the hon. Gentleman will feel able to withdraw the amendment.

David Heath: I am most grateful to the Solicitor-General. That was what I hoped to hear, and it will be of great reassurance to the hon. Member for Broxbourne (Mr. Walker), who raised the issue of watching sporting events on Second Reading. I am sure that he will be satisfied with the response, and on the basis of what the Solicitor-General has said, which is entirely what I expected him to say, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Dominic Grieve: I beg to move amendment No. 6, in clause 11, page 5, line 7, leave out ‘5’ and insert ‘10’.
The amendment simply deals with the penalty for the offence. I am mindful of the fact that the existing penalty for the offence under the Theft Act is five years’ imprisonment and that that has been translated as a maximum into this new offence. My reason for tabling the amendment was simply to discuss whether, in the light of current circumstances, we might consider raising the maximum limit. We know that the obtaining of services by deception or dishonestly, as the new offence will be described, can run to many hundreds of thousands of pounds in some cases. Admittedly, it may sometimes be that the service provider is foolish, but there have been instances when the fraud has been of considerable scope. Some operate a system over time that deceives large numbers of people in a number of ways, and as a result they receive a multiplicity of services and can live a life of ease and luxury—until they are caught—but it is those who supply the services who are the losers, because those who received them are often unable to pay.
The question arises in my mind whether five years’ imprisonment in such circumstances will always be sufficient. That is particularly so given that we are living in an era when the perpetration of fraud of various sorts is so much more sophisticated. One could put another figure on it—perhaps seven years—but I ask the Committee to consider that, because five years is what appeared in the Theft Act 1968, it does not necessarily have to remain at five years.
As I reread the Theft Act prior to the Committee stage, I realised how deliciously dated certain aspects of it seem. Indeed, we touched on that when talking about going equipped to cheat; and obtaining of services by deception has the slight ring of a person coming along and, in rather a small way, obtaining some service and being unable to pay for it. The classic example is of a person going into a restaurant, ordering a meal and then being unable to pay for it—and never having had the intention of doing so. We are not dealing with such problems here. In financial terms, they will often be substantial offences.
Against that, I am mindful that it may not be the only chargeable offence. In certain circumstances, especially if a great deal of money is involved, other fraud may be involved that could lead to a charge under clause 2. However, I would like the Solicitor-General to consider why we should make that distinction in such circumstances, and whether it is time to raise the maximum penalty. In the vast majority of cases, a penalty of more than five years imprisonment may not be required, but it would be a pity if prosecutors found themselves facing the fact that the easy and sensible offence to charge attracted a penalty that they considered insufficient to meet the gravity of the case.

Jeremy Wright: I welcome you, Mr. Jones, to the Chair. I too should declare an interest—perhaps I should have done so earlier today—as a non-practising barrister, but not in such an illustrious capacity as my hon. Friend the Member for Torridge and West Devon (Mr. Cox).
I support the amendment. The Solicitor-General knows that I raised the matter on Second Reading, and it is worth the Committee considering it. As my hon. Friend the Member for Beaconsfield said, it would equalise the position between the fraudulent obtaining of services and the fraudulent obtaining of property or money. When we as legislators consider maximum sentences, we should consider two things. The first is the level of criminality and the second is the value of what has been obtained.
It seems perfectly conceivable that the level of ingenuity used by the criminal to fraudulently obtain the provision of services may be just as intricate and well developed as that needed to obtain property or money. I therefore see no logical reason for drawing a distinction in the maximum sentences.
The second question is the value of what has been obtained. As my hon. Friend the Member for Beaconsfield said, other parts of the Bill recognise the fact that the world has moved on, as has the British economy. For example, it recognises that it ought to be possible to commit an offence in which a machine is deceived, although that takes away the concept of deception; it recognises that today’s economy is different to that of 1968 or 1978. However, it should also recognise that the economy has moved on, in the sense that it is predominantly a service economy, or at least more so than ever it was.
We should not just examine professional and financial services, although they are valuable and if they are obtained by deception or fraudulently a service of great value could have been gained. We should also consider the worlds of sport and entertainment. The hon. Member for Somerton and Frome talked about what may be obtained by somebody who watches a sporting performance. How about what may be obtained by someone who gains the services of a footballer or pop star by some form of fraud? The value of such services could be very high indeed.
To take topical examples, if a small football club were fraudulently to obtain the services of David Beckham or Wayne Rooney, the value of those services—metatarsals allowing—would be extremely high, higher than if that club had by some form of fraud managed to obtain Wayne Rooney’s car or house. When we consider the situation in the modern British economy, which is substantially a service economy, it would be wrong not to accept that a criminal with the same degree of ingenuity as one carrying out another type of fraud, obtaining services of the same value, also merits a sentence of 10 years’ imprisonment.
Of course, not every example of obtaining services dishonestly would merit a sentence of 10 years, and it may be that my examples are somewhat extreme, but surely maximum sentences are designed to cater for extreme examples. The Committee should consider making sentences equal for criminal acts of equal value.

David Heath: One is rather loth to enter the great debate about sentencing at the moment, given the extreme views that have been taken on all sides of the matter by various people in the past few days. However, we would all like to see a degree of consistency. I have argued for a long time personally and on behalf of my party that the basis on which sentences are made should be quite different and that there should be more openness and honesty about the intention of the sentencer. That is a commonly held view, and I do not know why it is not done.
Offences under clauses 1, 2, 3, 4, 7 and 9 carry a ten-year maximum sentence, whereas the offence under clause 6 and the one that we are currently considering under clause 11 carry a five-year maximum. The hon. Member for Rugby and Kenilworth (Jeremy Wright) was right to say that we should consider carefully the degree of criminality. If one were to take that to its absolute, one would have to say that there is no difference in the level of criminality of an offence under clause 6 from the other offences, only in the opportunity to put it into effect. There is a time difference between going equipped and committing an offence. A person may never actually commit the offence, which I presume is why it carries a lower penalty. We are satisfied that the five-year maximum is appropriate in clause 6.
On clause 11, I hear what the hon. Gentleman says about the value of services dishonestly obtained, but I have some difficulty in thinking of circumstances in which the clause would cover high-value services. The opportunity to ask Mr. Rooney to play for the local football team with the intent of not paying him at the end of his contract is unlikely and the idea that he would do so for very long is rather a far-fetched example and may involve other actionable offences such as breach of contract or misrepresentation. We need a degree of proportionality on the matter. I am open to the suggestion that a higher maximum sentence is required, but I would be much happier with it if I were satisfied that sentencing policy was in a fit state to accommodate maximum sentencing at different levels, that judges were given the proper discretion to do their job effectively and that there was a clarity and honesty in sentencing that is not there presently.
In general, some balance is appropriate between this Bill’s provisions and those dealing with analogous offences under the Theft Act. To what degree has the Solicitor-General made that assessment? Is this simply a read-across, or has he formed the view that the offences set out in clause 11 are consonant with similar offences under the Theft Act and will carry the same and appropriate penalties? If that assessment has not been made, it should be made at the earliest opportunity.

Mike O'Brien: We should begin by acknowledging that the hon. Member for Rugby and Kenilworth raised the matter with me on Second Reading, and I have considered it again. My reaction was to wonder whether, in order to get some parallel with offences relating to property and money, there was an argument for extending the measures. I thought about it with some care. There is always an argument for increasing sentences, but then I looked at the average sentence for obtaining services by deception, the parallel existing offence that the measures will replace. The average sentence handed down in 2004 was just over six months. In those circumstances, a penalty of five years and an unlimited fine rather than the average sentence appears adequate. We must consider what is proportionate in the circumstances.
The Law Commission considered the issue in its 2002 report on fraud. I did not explore it in great depth, but paragraph 8.16 says:
“On conviction on indictment, the maximum sentence available for the existing offence of obtaining services by deception is five years, and we see no reason why the maximum for the new offence should not be the same.”
We consulted on the matter, but received few responses. It might have been useful if the hon. Member for Rugby and Kenilworth, who originally raised the point, had suggested it at that time. I am sure that he was otherwise engaged winning his seat in Rugby.
If the average for even the most serious offences is just over six months’ imprisonment, a five-year maximum has the degree of proportionality that one seeks when trying to assess what the appropriate sentence ought to be. In view of the fact that those consultees who responded endorsed the five-year limit, that the Law Commission believes that it is right and that the average sentence for the existing offence appears to be just over six months, I believe that it is the right balance.
I shall not close my mind on the issue. If we feel at a later stage that the penalty is inadequate, we can reconsider it, but given how the courts are dealing with such offences, the measures will give judges enough flexibility to impose the maximum sentence in the most serious cases while preserving the average sentences for those that are indeed average.

Dominic Grieve: I listened carefully to what the Solicitor-General said. I would simply make one point to him, of which he may already be aware. The fact that the average sentence is of six months’ imprisonment comes as no surprise to me, but I am not sure that it is the central issue to the argument. On the whole, the sort of offence and the reasons why such offences tend to be charged is because they are of a rather low-grade kind. There are instances where, as I indicated in my opening remarks, substantial services of substantial value can be obtained. It is in such instances that I raise the question as to whether five years is necessarily sufficient. Rather than looking at the average of the sentences passed for this type of offence, that would require looking at whether there were instances where judges had been imposing the maximum and may even in their sentencing remarks been making suggestions that the sentence does not entirely meet the gravity of the offence, as the Solicitor-General will be only too aware.
Because of the nature of the discount that a person attracts for pleading guilty, as an example, often in such cases—and my experience is that they often end in guilty pleas—that will already be substantially shortening any sentence that is going to be served, because it will start with five years as the maximum and then have to discount it against that. I respectfully suggest to the Solicitor-General that that is a more fertile area to look at than the average sentence passed. That said, and mindful and grateful that it will be looked at again, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 11 ordered to stand part of the Bill.

Clause 12

obtaining services dishonestly

Question proposed, That the clause stand part of the Bill.

David Heath: I have a brief inquiry. I take the view that officers of a company should be individually responsible for the actions of the company when it acts dishonestly. However, as has been pointed out, there is no mens rea provision in the clause. The company officer does not have to have formed the dishonest intention himself or herself to be guilty of an offence under this section unless there is perhaps another construction on the clause of which I am unaware. That is of some concern. Is the Solicitor-General’s view that as an officer of the company they have a duty and responsibility to be aware of whether the action in which they are consenting or conniving is a dishonest and fraudulent act? If that is the view then by consenting or conniving, as the clause says, they would have formed the dishonest intent at that point. I would be grateful if the Solicitor-General told me whether that is the construction that he places on the clause and explained how precisely it would work.

Dominic Grieve: I find myself pipped to the post by the hon. Member for Somerton and Frome in rising so quickly to his feet, and I would not rise myself unless there were a further slight gloss to apply to precisely the same point I wanted to raise. I think that part of the answer to his question can be given; namely, that as a company can only commit an offence through its officers, it must follow that if the body corporate is going to commit the offence, someone in the body corporate must be acting dishonestly. That would normally be the person who would be seen to be consenting or conniving to the commission of the offence.
But the nub, and maybe the point that the hon. Gentleman is getting at, is that it seems to me that it at least technically possible on the reading of clause 12—I am aware of its derivation; this has been around for rather a long time—for one to have a company where a body corporate commits an offence through the dishonesty of one of its directors, but with the consent of another of its directors who is not, himself, acting dishonestly. Technically, in such circumstances both of them would be convicted of the offence when the body corporate was convicted. If that is the case, it might be readily curable. However, the Solicitor-General might indicate that that is not necessary, or that if we were to try to cure it we would cause all sorts of other problems. However, that was what struck me about the clause as, I suspect, the main issue struck the hon. Member for Somerton and Frome.

Mike O'Brien: In essence, clause 12 follows section 18 of the Theft Act 1968. It is the standard provision that makes company officers who are party to the commission of an offence under the Bill by their body corporate liable to be charged for the offence as well as the company. A director, manager, secretary or other similar officer of the body corporate, or a person purporting to act in that capacity, has to be in a position in which he can be diligent about the work that he does. There must be a reasonable standard of diligence; such people must know what they are about. The requirement in the legislation is connivance or consent, so they must know what they are conniving or consenting to. If they are conniving or consenting to something that is clearly dishonest, and they are sufficiently aware of that to be aware of the implications, then they are in a position in which they have connived or consented to an offence.

Dominic Grieve: I take the Solicitor-General’s point, but there is a difference between consent and connivance. Connivance, by its nature, implies guilty knowledge—that is how I always understand the word, given its ordinary meaning—whereas consent need not. It might be that there is a flaw in the Theft Act 1968, or it might be a problem that has never arisen, but it is at least possible, taking the strict technical meaning, that the body corporate commits an offence because one of its directors does so deliberately—so the dishonesty comes from that director—but several other directors consent innocently to the commission of that offence. In that case, as the clause is drafted, they could be caught with all the draconian consequences that flow from it. I have to accept that the reality is that the prosecutor probably would not prosecute them. However, if there is a way of avoiding the danger that they could be prosecuted, it might be worth considering, because they are not the people against whom the clause is, or should be, aimed.

Mike O'Brien: The clause is aimed against those who have given informed consent, to use the phrase, in relation to an act that has been done. As the hon. Gentleman said, for a company to be liable, an officer of that company has to have committed the offence. That is the identification principle. Others may connive or consent, but they must know what they are conniving or consenting to. It must be an informed consent, or a connivance, so they must be sufficiently informed that they are aware of the nature—or, at least, to some extent, of the dishonesty or implications—of the act.
Some provisions of this type include neglect, but that is not included here. This is not about somebody who is a bit negligent and does not know; he has to have the ability to take a view on a matter, and then to have taken that view by having given his consent in a practical way. We consider that that informed consent is sufficient to amount to a knowledge of dishonesty. Whether a person is, himself, dishonest might well be a different matter; it is a fine line. The question is whether they are they well enough informed about the implications to have taken a step that amounts to consent based on uninformed knowledge of the possible consequences.

Question agreed to.

Clause 12 ordered to stand part of the Bill.

Clause 13

Evidence

David Heath: I beg to move amendment No. 15, in clause 13, page 6, line 3, at end add
‘that the Secretary of State may by order prescribe.'.
First, I thank the Solicitor-General for his letter in response to my point made to his ministerial colleague on second reading. The intention of the amendment is to add clarity to subsection 4(b), which defines “related offence” as “conspiracy to defraud” and
“any other offence involving any form of fraudulent conduct or purpose.”
That definition does not have any clear indication of what appendices are intending to be included, and I accept that there are a finite number. It would be of value, in terms of clarity, if the Secretary of State prescribed the offences that he considers to be caught by that definition. Everyone would then be clear about which offences are being referred to in applying section 13. It is a fine point. The Solicitor-General may be able to help me out by saying whether he will accept the amendment or what his definition is—that will have almost the same effect—if he cares to read it into the transcript.

Mike O'Brien: I am not going to read a definition as such. As drafted, in our view, clause 13 makes clear that the offences under discussion are those involving any form of fraudulent purpose or conduct. That provides the right degree of specification for the context. We should bear in mind that the clause addresses the needs of civil justice and not to be deprived of evidence in property proceedings on the grounds that the answers and documents given may incriminate the person who gives them.
At the stage when someone is giving answers, the matter of whether an answer or a document discloses a fraud under the Bill, or some other type of fraud, may not be clear. It is likely that it will only be clear that his answers might show that some form of fraud has taken place. That might be a fraud that could be prosecuted under the Bill, or possibly under section 458 of the Companies Act, VAT legislation or tax law. We should not tie the law to a specific list of offences which might leave gaps in which a person who does not want to answer questions, might say that it may or may not fit into a particular list.
We want any form of fraudulent purpose or conduct to be covered by that provision. For example, with a list of specific offences, a person might say that the clause does not apply. Therefore, he is not going to answer any questions because he might disclose an offence of benefit fraud, for example, that should be dealt with under the Social Security Acts. We would have to list everything in order to make sure that we do not give a loophole, that someone could use not to answer questions in a civil case.
We could put the Social Security Acts on the list and all the offences that could be characterised as fraud. However, it would be much simpler, more straightforward and understandable for individuals and for the court, to know that we have a generalised definition in the Bill. Ultimately, it will be a matter for the judge in the trial as to whether a party to civil proceedings can refuse to answer questions on grounds of self-incrimination. It is the judge who has to decide whether clause 13 should apply or not and clause 13 exemption applies. Judges are perfectly capable of applying clause 13. Our approach is better than the specific list of offences that the amendment suggests. A specific list would add to a great deal more confusion. It might also encourage persons who wish to refuse to answer questions to find a loophole. Something might not be on the list, which they might have cause to fear, and they might not want to incriminate themselves.

Geoffrey Cox: Let us suppose the party to the civil litigation was obliged under the clause to concede that part of the property that had been accumulated had been invested in a drugs enterprise. Would he be protected under the first line of subsection (2), as further defined in subsection (4)? I respectfully suggest that he might very well not be, which would be a grave lacuna in the protections under the Bill and likely to be incompatible with the European convention on human rights. If a party to civil litigation—let us say that he is a trustee—is obliged to answer that part of the property has been invested in a drugs enterprise, and if he answers honestly, as he must, he could, as I read the Bill, be prosecuted on the strength of his admission, because drugs enterprises would not necessarily include fraudulent conduct. Will the Solicitor-General give urgent and genuine consideration to the real risk that there is a lacuna in the clause and particularly to the compatibility of its provisions with article 6, among others, of the convention.

Mike O'Brien: In the end, it will be up to a judge to decide how to apply the provisions. However, I shall examine the hon. Gentleman’s point and its implications, and I shall then write to him, if that is appropriate. I suspect that there is not a lacuna, but he raises an interesting and potentially difficult point, and I ought to give it more thought. If necessary, we can return to it on Report.

David Heath: This is an interesting point. I am not clear—perhaps I am being particularly obtuse—which judge makes the judgment. Is it the judge in the civil proceedings who determines whether the person can be excused from answering the question on the grounds of self-incrimination?
The Solicitor-Generalindicated assent.

David Heath: The Solicitor-General is nodding, so that is the point at which the person is excused or otherwise. In that case, what happens in cases where criminal proceedings take place subsequently and the prosecution wishes to use evidence that was given on the basis of a decision by the civil court judge? What if that person was not covered by the clause, and the civil proceedings judge had wrongly directed that the person was obliged to answer the questions, because the offence was not an offence or a related offence under the clause? The judge in the criminal proceedings would inevitably say that the evidence was admissible, and nothing could be done to turn back the clock. The defendant’s convention rights would be breached by virtue of those two decisions, both of which could be entirely proper. Obviously, one of the decisions must be mistaken, but they can both be made in good faith by two judges in quite different proceedings.
A degree of clarity in the definition, rather than it allowing an infinitely expandable group of related offences, would therefore be advantageous. It would be perfectly in order in statute terms to say that all offences are covered by the provision. That would very debatable in terms of convention rights, but it is a perfectly arguable position to say that all offences could be covered. The Minister would then have a provision to say that, on any offence, that the information would not be admissible.
The Minister is in some difficulties, having two points at which an offence is included or not: first, when the judgment is made in civil proceedings, and then when it is made in subsequent criminal proceedings. The judgments can be different on quite proper grounds. So, I invite the Solicitor-General to give that further consideration before Report, as I fear that we may unintentionally be producing a new difficulty through that lack of precision.

Dominic Grieve: I am sorry to have been out of the room briefly when the hon. Gentleman first raised the question. It seems to me that it cannot have been the Government’s intention to remove the privilege against self-incrimination in criminal proceedings—if that is indeed what clause 13 does, as highlighted by my hon. Friend the Member for Torridge and West Devon, outside the scope of fraud and related offences—and that in those circumstances, the provision must be wrong. If the Solicitor-General can reassure us on Report or in writing that we have misunderstood the position, so be it. Otherwise, the Government will be constrained to do something about it, because it is clearly incompatible with every principle of law in this country, quite apart from the Human Rights Act 1998.

David Heath: I think the waters are rather murkier than might have been presumed, so a little further consideration is required, but if the Solicitor-General does not accept that and thinks that the provision perfectly self-evident, I have obviously failed to understand the situation—which is entirely likely, as I do not have the expertise in these matters of the hon. Members for Torridge and West Devon and for Beaconsfield. If I have misunderstood, I would be delighted if the Solicitor-General explained what I have misunderstood.

Mike O'Brien: Briefly, the intention of clause 13 is to remove the right relating to self-incrimination in property cases. However, if the person answers in civil proceedings, the evidence cannot subsequently be used in a criminal trial—in a drugs case of the sort to which the hon. Member for Torridge and West Devon referred and which I said I would examine in greater depth. If the person refused to answer questions in civil proceedings, the privilege against self-incrimination is not removed, if his answer relates to a drugs offence.
If a person refused to answer but the civil judge ruled that subsection (1) applied, and ordered him to do so, the use of the evidence is prohibited by subsection (2). We do not consider that a criminal judge, who has to comply with human rights legislation, would take a different view from a civil judge. Even if neither applied the Human Rights Act 1998, the evidence would be excluded under section 78 of the Police and Criminal Evidence Act 1984. I think that we are covered, but I hear what the hon. Gentlemen have said, so I shall look again at this complicated area of law. On the face of it, the provision seems reasons, but, as I have indicated, I will look at it again.

David Heath: I am grateful to the Solicitor-General and look forward to hearing his further consideration at a later stage.

Geoffrey Cox: I wonder if I might make a supplementary point on the clause. I am necessarily thinking as I go along, but I ask the Solicitor-General to consider one further point. Under subsection (1), and leaving aside the question of “complying with any order” for now, the person would not be excused from
“answering any question put to him in proceedings relating to property...on the ground that doing so may incriminate him”—
leaving aside also the other persons referred to—
“of an offence under this Act or a related offence.”
It would appear that if what the Solicitor-General just said is correct, someone would retain their privilege if answering might incriminate them of a drugs offence. That was the Solicitor-General’s answer to my question. In those circumstances, the defendant would be entitled at the first stage to say to the civil judge, “I am not answering because my answer may incriminate me of an offence.” The difficulty I foresee is that the judge in a civil case will not be able to inquire much further. He may have to say, “Will you tell me for what offence you think I may afford you the grounds to refuse before I can decide whether you are correct?”
I foresee some difficulty that may benefit from further consideration by the Solicitor-General. Would he be good enough to write to me on how the system would work under clause 13? Clearly, if the offence is a drugs offence or another offence unrelated to property, the system will be highly unsatisfactory at the civil stage of proceedings. I imagine that it will be a judge with a glowering face who faces a litigant who says, “I am taking the fifth and the offence is not one relating to property.” It is difficult to see how the system will work, so I would be most grateful for further examination.

Mike O'Brien: I am very happy to consider that.

David Heath: The hon. Member for Torridge and West Devon raised a point that I was coming on to: the fact that the litigant must decide during the civil proceedings what he might be accused of at a future stage by a prosecuting authority. He must decide about the range of offences on which he might be indicted before seeking to excuse himself of giving evidence. That is not an entirely satisfactory position to be in. Given that the Solicitor-General has said that he will reconsider the matter and communicate his views to the Committee, and with the specific leave of the hon. Member for Torridge and West Devon because I do not want to catch him out again, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 13 ordered to stand part of the Bill.

Clause 14

Minor and consequential amendments etc.

Question proposed, That the clause stand part of the Bill.

Mike O'Brien: The clause gives effect to schedules 1, 2 and 3, which set out, respectively, the legislation to be amended, the transitional provisions and savings and the legislation to be repealed by the Bill.

Question put and agreed to.

Clause 14 ordered to stand part of the Bill.

Clause 15

Commencement and extent

David Heath: I beg to move amendment No. 16, in clause 15, page 6, line 11, at end insert—
‘( ) The Secretary of State may not appoint a day by order for section (Abolition of conspiracy to defraud) until he has received a report on the operation of this Act, and in any case not earlier than three years after the commencement of the Act.'.

Martyn Jones: With this it will be convenient to discuss the following: New clause 2—Abolition of conspiracy to defraud—
‘(1) The common law offence of conspiracy to defraud is abolished for all purposes not relating to offences wholly or partly committed before the commencement of this Act.
(2) An offence is partly committed before the commencement of this Act if—
(a) a relevant event occurs before its commencement, and
(b) another relevant event occurs on or after its commencement.
(3) “Relevant event” in relation to an offence, means any act, omission or other event (including any result of one or more acts or omissions) proof of which is required for conviction of the offence.'.
New clause 9—Abolition of conspiracy to defraud—
‘The offence at common law of conspiracy to defraud shall be abolished and no further prosecution brought thereunder, upon the expiration of a period of five years from the day on which this Act is passed, unless there has been a resolution of both Houses of Parliament within the said period to a contrary effect.'.

David Heath: We come now to the clauses on commencement. The amendments deal with the common law offence of conspiracy to defraud. We could have a long debate on the merits or otherwise of the offence, but that would not be a productive use of the Committee’s time because there is broad agreement on both sides that the common law offence should be abolished. That is the theoretical position of the Law Commission, which indicated that it was insupportable to retain the offence in law once the new statute was in place as a replacement. However, on Second Reading, the Minister said, quite properly, that although he wanted the common law offence to be abolished, he had to take note of the very strong reservations expressed in the consultation process, not only by the wider spectrum of consultees but specifically by parts of the judiciary, who together with some of the prosecuting authorities perceived the offence of conspiracy to defraud as being of value.
I slightly discount the opinions of prosecuting authorities, because it is always helpful to them to have the widest possible number of offences at their disposal to secure a conviction. For them to argue that they should have a wider spectrum, even in the context of new offences, is to some extent to be expected and is natural. However, it is not a position that we as a legislature should take if we are content that the full range of offences under the broad title of fraud is covered by the new law.
The offence of conspiracy to defraud has been widely criticised. As I said on Second Reading, one of my principal concerns about it is that, because it is a catch-all offence, it provides a very straightforward route by which the dual criminality requirements of an extradition application can be met. It is easy to establish that someone has, or could have, committed the offence in this country and that that person is therefore extraditable on a related fraud offence in another country. I instinctively feel that that is a dangerous position.
Despite having listened to the arguments on both sides and being firm in my conviction that the offence of conspiracy to defraud should be removed at the earliest opportunity, I accept the Minister’s comment that he would prefer a “suck it and see” approach in the short term, so that an assessment can be made of how the new offences bed down and of the pattern of prosecutions. He was kind enough to provide the draft guidance for prosecutors, which I think is extremely helpful.
We therefore have a choice. The first course of action open to us is to have a period of review in which the Solicitor-General or the Attorney-General carefully consider the prosecution patterns and whether there have been offences that have proved impossible to prosecute except under conspiracy to defraud, followed by introduction of new primary legislation to abolish the common law offence. Alternatively, at this stage and as a better process, we could incorporate into the Bill a provision for abolition, with safeguards for the Minister in the form of a delay in commencement, as I have suggested, or a sunset clause for the offence, as suggested in the amendment tabled by the hon. Member for Beaconsfield. Either approach ends at almost precisely the same result. The hon. Gentleman’s approach has an automaticity that mine does not—mine simply allows for a delay in commencement of the relevant part of the Bill until such time as the Minister introduces an Order in Council. To some extent mine is a more Government-friendly amendment than the hon. Gentleman’s in that his forces their hand, whereas mine invites them to consider the point. The merit of both courses is that we would not have to start from square one with a new Bill or find another suitable vehicle for the repeal or abolition of the conspiracy to defraud offence. Either way, the spade work is done, the legislation is on the statute book and someone only has to press the button to make it happen.
Given that the Solicitor-General has made it clear that he would prefer to abolish the offence in due course, it is unquestionably better in procedural terms to deal with it in the Bill now, rather than revisit the matter later. However many Home Office and Department for Constitutional Affairs Bills we have to deal with month in, month out and year in, year out, hon. Members can bet their lives that someone will say that none of them are appropriate for the specific purpose and there will be a substantial delay, which is avoidable and unnecessary. I commend my amendment and the new clause to the Committee.

Dominic Grieve: The hon. Member for Somerton and Frome is quite right: new clauses 2 and 9 set out different ways to achieve the same thing. I prefer my amendment, because the implication in the hon. Gentleman’s is that although the common law offence of conspiracy is abolished, that can be delayed to enable a review to take place. I drafted my amendment on the basis that we should have a five-year period to see how the new Act operates, after which it would be incumbent on the Government, if they decided to keep the common law conspiracy to defraud offence, to get a resolution of both Houses of Parliament to do so. I was trying to reflect the debate on Second Reading. I was persuaded by the Solicitor-General and by rereading the Bill that in the next five years we may conclude that, despite best efforts, the common law offence of conspiracy to defraud must be retained. I am open-minded about that. The arguments about why it would be desirable to get rid of the offence—if that is possible—have been well rehearsed.
The common law offence is wide and has some unintended consequences, the worst of which is the possibility of an individual being prosecuted for conspiracy to commit an offence which, if he had acted on his own, would not amount to a substantive offence at all. That has always been the greatest criticism levelled against it. However, having said that I also accept—after conversations with others who have had greater use of the conspiracy offence—that it is and may remain an important tool in bringing prosecutions that cannot be covered by the offences that we have identified.
I am open to persuasion. I should like the common law conspiracy offence to go, but that might not be possible. New clause 9 would enable that to happen in a straightforward fashion. If there were unanimity that it should not go within five years, the Government would only have to introduce a resolution in both Houses of Parliament, on which we could vote pretty readily—it is a matter of half an afternoon’s business in both Houses—in which case we would have decided that it should remain. Knowing after nine years in the House how the place works, my worry is that if we do not do that or accept the proposal advanced by the hon. Gentleman, it will be difficult to find Government time even for a short Bill to get rid of the common law offence of conspiracy. I should add that it would be difficult whether the present Government or a Conservative Government were in office. That is the reality, so I do not want us to let this moment pass and lose the opportunity for what I think can be relatively short consideration, probably backed up by a report produced by the Government or a further report produced by the Law Commission on which Parliament can base a final decision, having had an opportunity to see how the Act works in practice.
I urge the Government to consider in a constructive light either my proposal or that of the hon. Member for Somerton and Frome, because it is difficult to see, particularly as regards new clause 9, any real downside for the Government in accepting it, or any downside in the operation of the courts system or the bringing of justice. It is a simple device that would ensure that, within the next five years, the matter would be reconsidered in a manner that did not take up too much of the House’s time, and we could make a final decision with the benefit of a more informed view of the operation of the legislation.

Jeremy Wright: It seems clear in the draft guidance that the Solicitor-General has helpfully allowed all of us on the Committee to see that the Government’s intention is, if they can, to persuade prosecutors not to use the common law offence, but to use instead the new statutory offences in the Bill. As has been said, there is a measure of agreement in the Committee that that is a wise thing for the Government to do. If that is the case, it would also be wise of the Government to make it as clear as possible to prosecutors that the Government’s intention is that the common law offence should, if possible, be phased out. Adopting new clause 9 would give the clearest possible signal in that regard and might help the Government to achieve what they are properly trying to achieve in the draft guidance. For that reason, I support the new clause.

Geoffrey Cox: Not having been present for previous debates on the Bill, I am uncertain of the basis on which the Solicitor-General advanced the argument for continuing the conspiracy to defraud offence. I can understand the need to see how the clause unfolds—I was going to say “unravels”, but that would probably be an unfortunate way of putting it. I hope that it does not unravel. I can understand the need to see how the clause unfolds in practice in the courts. It is presumably possible to indict a defendant for conspiring to commit fraud under the Bill, so that one would have a charge of conspiracy to commit fraud with the particulars of the offence to be committed in one of the three ways set out in the Bill.
If the Government’s objective of drawing a wide offence of fraud is achieved, it is hard to see what is left for conspiracy to defraud. I know that the Solicitor-General is not necessarily saying that anything may be left; it is just a question of testing to see. I imagine that I am right about that, but if any specific instance or occasion of fraud were thought to be omitted potentially from the Bill, I would be interested in hearing about it in the Minister’s response. I, for my part, cannot see one and I am surprised by the Solicitor-General’s want of confidence in the Bill that he is presenting.
Fraud is a broadly defined offence and it seems to me that there will be little opportunity for indicting the common law conspiracy to defraud. Judges will, I suspect, want to hear a justification in the light of the Act—as the Bill will be—for why the common law conspiracy is being indicted. Once the Bill becomes law and has settled into the mind of the profession, I would be surprised to see any further conspiracies to defraud on indictment, because judges have historically wanted to understand what it is about a conspiracy to defraud—a common law conspiracy—that it is required on an indictment. Why not a substantive offence? Why not a conspiracy to commit a substantive offence? When the new offence exists, they will ask, “Why not conspiracy to commit these substantive offences, or this offence committable in a number of ways?” Many prosecutors will feel, before they put a conspiracy to defraud count on the indictment, that they will be forced to justify it in a preliminary hearing, or possibly a preparatory hearing. I suspect that they will be deterred by that prospect when the Bill is enacted and its provisions become available to them.
I wonder whether there will be many opportunities for the Government to watch how this measure is used. I hope that I have not perplexed the Solicitor-General; If I have not made my point clear, it is basically that if I were prosecuting, and I had this measure to indict fraud, whether it be on the basis of a conspiracy to commit it, or a substantive charge of fraud, I would expect the judge to be quite harsh to me if I chose to indict for a conspiracy to defraud. He would want to know why—what was the specific reason? What did I espy in the conspiracy to defraud that went wider than the charges of conspiracy to commit the other substantive offences?
I suspect, therefore, that there will not be much testing of the provision. I very much doubt whether many conspiracies to defraud will be seen on the indictment. I imagine that the Solicitor-General will respond, “Well, if that’s the case, then so be it—we’ll get rid of it,” but if, as I predict, it simply withers on the vine, would it not be better to interpolate into this Bill a provision for its termination, than to wait for all the process to be gone through, in years to come? It would have to be removed by a special Act of Parliament, or by some insertion in another Act reforming the criminal law; I would suggest the latter.

Mike O'Brien: I hoped not to have to go into why we need to retain conspiracy to defraud, because I thought that there was consensus on that, but for the benefit of the hon. Member for Torridge and West Devon I shall explain why we need to retain it. There is broad consensus that we probably need to retain it for the time being, because there are circumstances in which it may need to be used. I have circulated a copy of the working draft of the Attorney-General’s guidance on the use of the common law offence of conspiracy to defraud and the circumstances in which it may continue to be used. I hope that the hon. Gentleman has it; we hope to be able to publish it when Royal Assent is given to this Bill. The aim of that guidance is to indicate the Attorney-General’s wish that we do not use conspiracy unless it is necessary to do so, but it accepts that there may well be circumstances in which it is necessary.
We wish to review the operation of conspiracy to defraud after three years. We want to see how this Bill, when it is law, affects the way in which prosecutions take place. We hope that it will cover most circumstances, although it will not cover them all, and that the courts and prosecutors can therefore examine the Bill and other legislation to see whether most of the mischiefs that we want to deal with can be dealt with otherwise than by conspiracy to defraud.
We all want that common law offence to be removed, and we hope that we will be able to do that in due course. We hope at the end of three years to be in a position to say that we will remove it. We all accept that we need to wait for that three-year period to end. My concern about the amendments is that they seem an untidy way of going about that removal. Having a sword of Damocles dangling over the legislation, or over the common law offence, would create a level of uncertainty among prosecutors about whether they ought to be charging it. Parliament will clearly have said that it should not be there, and there will be a time scale on it. Well, perhaps we do that with other offences, but in this circumstance we would be saying, over a period of five years—or, alternatively, a shorter period—that the intention is to get rid of it. The concern is that that would have a negative effect on our prosecutions from the moment of Royal Assent, as Parliament would have expressed its view that the offence should be abolished. There would then be uncertainty and possibly a little confusion among prosecutors about how very serious alleged offences and offenders should be investigated and charged, and whether they should be using the offence at all. Arguably, there would be the Attorney-General’s guidance to reassure them, but there would also be the will of Parliament suggesting that Parliament does not have a great deal of faith in this offence. That is an untidy and uncertain way of proceeding.
I do not think that there is any great difference in view, at least among Front Bench Members, on what ought to be done. In terms of how things should be done, I think that there is a fear that perhaps the Government will not get round to doing them. I have noticed—the Opposition have made quite a point of saying this—that there has not been a dearth of criminal justice Acts in recent years. I suspect that in the coming years there will not be a dearth of such Acts either, and that will enable conspiracy to defraud to be dealt with.

Dominic Grieve: My heart sinks. The last thing that I want to do is to encourage another criminal justice Act in any circumstances. Swords of Damocles concentrate minds wonderfully. The one thing that I have learned in politics in the past nine years is that most of the problems that we experience are due to inertia. Anything that shifts inertia is worth having.
I find it difficult to accept that introducing my sunset clause will suddenly mean that the existing law becomes unusable. I find that a poor argument. There are sunset clauses for all sorts of other things that we have done—or that we do—in this Parliament. They do not mean that the legislation becomes unusable as a result.

Mike O'Brien: Not so much unusable, because that is not what I have argued. I have argued that such a provision would produce uncertainty. It is untidy and uncertain, and that uncertainty would lead to some prosecutors feeling that they should not charge under conspiracy to defraud. That might well mean that the full range of the culpability of a particular defendant might not be covered, even though our intention is that it should be.
We are saying, “Prosecutors, you need to continue to use this in particular circumstances”—we shall discuss those in a moment—“but we do not think it is a good piece of law and we intend to abolish it in due course.” Sunset clauses have been used on occasion, but they are not the best way of proceeding. They have some faults, particularly when we are dealing with a common law offence that is based on case law and the development of the law over a long period. There is an understanding of it and the way in which it should be used. That understanding would be complicated by a sunset clause that says, “This isn’t very good at all. You ought not to use it—or you should not use it very much—except when the Attorney-General says perhaps you should.” It is probably workable to do what the hon. Gentleman says; it is just that it is not the best way of proceeding. This is matter of judgment. Such a provision would be untidy and would lead to a degree of uncertainty that we do not need.
I do not think that we will be in a position where we are unable to remove the provision in three years’ time, because a Bill will doubtless be present then, or shortly thereafter, to allow a Government to deal with a conspiracy to defraud—a common law offence—and to remove it from the statute book if that is the desirable approach.

Jeremy Wright: I would entirely follow the line of argument that the Solicitor-General is taking if it were not for the fact that the Government, by the draft guidance, are clearly trying to influence the behaviour of prosecutors. He cannot have it both ways. He cannot argue that the problem with new clause 9 is that it would deter prosecutors from doing what they were otherwise going to do when the draft guidance has precisely that effect. Surely it must be right that if over the next three or five years prosecutors, despite the draft guidance, say that conspiracy to defraud is the appropriate charge in a large number of sets of circumstances, under the proposed procedure set out in new clause 9 both Houses of Parliament would understand that and doubtless conclude that conspiracy to defraud, as a common law offence, should remain.

Mike O'Brien: The approach that prosecutors will actually take is set out in the draft guidance. Paragraph 6 reads:
“In selecting charges in fraud cases, the prosecutor should first consider”—
which we have—a couple of tests:
“whether the behaviour could be prosecuted under statute—whether under the Fraud Act 2006 or another Act or as a statutory conspiracy;”
and, further,
“whether the available statutory charges adequately reflect the gravity of the offence.”
Those tests need to be passed, but we are not deterring a prosecutor from using conspiracy to defraud where that is the most appropriate approach. We are saying that if one is considering that, look at the tests set out by the Attorney-General and then make a decision about whether one should proceed by way of conspiracy to defraud. In many cases, I suspect that a prosecutor will decide that that is the appropriate way to proceed. Then we will be able to consider the outcome of those cases and take a view in three years’ time as to whether it is appropriate to decide to remove conspiracy to defraud, not just because of the Bill but because other pieces of legislation and other views about how legislation should develop will have come to pass.
I will deal with the point of the hon. Member for Torridge and West Devon because that will enable me to elaborate what else will take place. We have a number of things moving forward by way of consideration of how legislation should develop that may well have an impact. The Fraud Bill—or the Fraud Act, as in due course I hope it will become—is not the whole answer to the issue of conspiracy to defraud in the common law offence. Even when the Bill receives Royal Assent there will be examples of dishonest conduct that it will not be possible to prosecute under statute; for example, where it is intended that the final offence be committed by someone outside the conspiracy. So, a group of people has conspired in order to defraud, but the final act is committed outside the conspiracy. Secondly, there will be cases where it cannot be proved that the accused had the necessary degree of knowledge of the substantive offence, so the degree of knowledge is an issue there. Moreover, as Lord Rose’s Committee—which took a very strong line on support for conspiracy to defraud remaining as an option for prosecutors—emphasised, conspiracy to defraud is a vital tool in prosecuting cases with multiple defendants and multiple frauds.
Therefore, vital as the Bill is, other pieces of the jigsaw have to fall into place before the offence can be safely repealed. In addressing the issue of multiple offences, we need time to gauge the effect of the Lord Chief Justice’s protocol on the control and management of heavy fraud cases and the sample count provisions in the Domestic Violence, Crime and Victims Act 2004 that we hope to implement later this year.
In ensuring that the law fully covers forms of participation in crime that do not amount to statutory conspiracy, we need to consider a new law on assisting and encouraging crime in the light of the Law Commission’s study of that issue, which we hope will be published shortly. That again may lead to new law, which may affect the way in which conspiracy to defraud is able to be removed.
The Government’s review, which is expected in three years’ time, will thus need to consider the situation not only in the light of the practical operation of the new fraud offences, but other relevant changes including any that may flow from the ongoing review of fraud. We hope that that fraud review will be published shortly. I cannot give a precise date at the moment, but I am aware that the conclusions are nearing fruition. That, too, might have an impact.
If the conclusion of the 2009 review is that the offence should be abolished, that would be achieved with proper safeguards after a time in which the Government and Parliament have been given a proper opportunity to consider the matter, including whether any alternative provisions are required. To suspend the sword of Damocles over the whole proceedings would not be the best approach. It would lead to an element of confusion. I hope that the Committee will not consider that an appropriate way to proceed. It is important to remember that one possible, indeed likely, scenario is that we will not just repeal conspiracy to defraud but simultaneously make other changes on statutory conspiracy or criminal procedure. We do not know what those changes might be, because they have not yet been recommended by the appropriate committees, but we may well have to examine a different way of covering parts of conspiracy to defraud in a more satisfactory way that will require different legislative changes. The amendments would not allow for that; they would mean simply that the offence was going. That could create a level of difficulty in developing future legislation that we really do not need.
The Government have made it clear that they are committed to repealing conspiracy to defraud at some stage. We have said that
“it remains our long-term aim to repeal this common law crime and we will review the position”
in due course. We need to be sure that all the pieces of the jigsaw are in place before we make the decision to repeal, and it would be inappropriate to do so now.

David Heath: That was an interesting little debate. One must assume that prosecutors will not listen to the Solicitor-General when he says that the Government’s clear intention is to repeal the law, because if they did they might become confused as to whether they are to use the conspiracy to defraud provisions. As an aside, I think that Damocles and Canute dealt wisely with people who got the wrong end of the stick. In the case of Damocles, the concentration of the mind was greatly enhanced by the provision of his simple memento mori.
I take seriously what the Solicitor-General says on the matter, and he rightly says that there are not great differences in the Committee on what we want to see. I welcome the guidance, which carries a clear intimation that the conspiracy common-law offence is no longer the preferred route for prosecutions. I part with him on his view that it will be the lot of a future Government to repeal the provision. In my experience, Governments are not very good at repealing laws or removing offences. They are very good at creating new offences and laws, which is why we have criminal justice Bills coming one after another like buses in the high street, but we do not often have Bills that repeal existing offences or laws. That is one of the difficulties of our system: it has a ratchet effect. We constantly accrete new laws but we do not remove the old ones, thus ending up with more confusion and a less comprehensible legal system.
There was a great deal of merit in what the hon. Member for Beaconsfield said about a sunset clause, but I understand why the Minister might be nervous about that. To an extent it would take the matter out of his control, meaning that he or his successor would have to take action to prevent the law from being repealed. I concede that there is a possibility that that might affect the view of prosecutors, as we approach the time of the expiry of the offence, as to whether it is a proper offence to prosecute. I do not think that that can possibly be true of the commencement clause that I have suggested as an alternative device. It is common for Government to put provisions in Bills and then not to commence with them when the Bill comes into force. One of the reasons why we have difficulties with conspiracy to defraud is the problem of multiple counts, which we dealt with in a provision in the Domestic Violence, Crime and Victims Act 2004 that the Government have not yet brought into force because it has a delayed commencement.
This is a perfectly normal way of dealing with things as far as this and other Governments are concerned. Therefore, it is within the gift of future Ministers never to commence this part of the Bill if the evidence is that the conspiracy to defraud offence is still required to prosecute certain cases. I do not accept that it shows any lack of clarity or decisiveness on the part of the Government simply to provide the means by which a future Government can take a decision without having to start from scratch with primary legislation. I hope that my new clause 2 passes the drafting test, as it is lifted directly from the original recommendations of the Law Commission, which is pretty good at drafting such things.
I still believe that the Government would be much better advised to include the provision now and then to make a decision in three, four or five years’ time—at any time, in fact, as there is no time limit. My new clause requires only that commencement should not be within three years in order to accommodate the Solicitor-General’s reservations, but it does not require him to take action at any stage unless he or his successors are satisfied that the law is working properly. The new clause would mean that we would not have to start with new primary legislation.
In conclusion, I remind the Committee what the Law Commission had to say about conspiracy to defraud. It stated:
“On any view, the present position is anomalous and has no place in a coherent criminal law.”
It could not have been more damning of the use of this offence. The purpose of the Bill is to replace it, and replace it it does. Reservations are still expressed partly because we have not implemented the multiple count provisions and partly because nobody is absolutely sure that circumstances would not arise in which conspiracy to defraud or something similar might be required. In three or four years’ time, we will know that. We will know whether there are any circumstances in which it makes sense to retain a common law offence of this sort. My suspicion is that there will not have been any such circumstances, and my provision would make it easy for the Government then to take a decision without wasting parliamentary time. I am still hopeful that the Minister will reconsider that between now and Report.
If the hon. Member for Torridge and West Devon is not planning to intervene on me at this stage, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 15 ordered to stand part of the Bill.

Clause 16 ordered to stand part of the Bill.
Further consideration adjourned.—[Mr. Campbell.]

Adjourned accordingly at twenty-three minutes past Six o’clock till Thursday 22 June at Nine o’clock.